Vendors are expected to ship 110 million examples of VR hardware by that same year as new device types emerge. Among them are standalone units, according to says Eric Abbruzzese.

"Low cost and high accessibility has, and will continue to, drive VR adoption with mobile devices and associated VR accessories," said Abbruzzese in a statement. "However, a trend toward standalone devices is surfacing, and will continue over the next five years until mobile and standalone VR devices see parity in terms of shipments."

The standalone VR hardware segment of the market will register a whopping compound annual growth rate (CAGR) of 405 percent through 2021 as buyers flock to headsets that don't have to be tethered to a PC or other device to experience VR, the firm said. By comparison, the mobile VR segment – typically characterized by affordable headsets that are powered by a smartphone – will grow at a 42-percent CAGR during the same period.

Naturally, gamers are excited about VR and will help drive the market forward. However, businesses are also expected to add fuel to the fire. Through 2021, the retail and marketing VR applications segment will expand at CAGR of 124 percent, ABI Research said.

In the meantime, virtual and physical reality are on a collision course.

"The three primary VR device types — mobile, standalone, and tethered — are entering the market with unique value propositions, target audiences, and use case support. However, there is the less understood market of mixed reality [MR] on the horizon," said Sam Rosen, managing director and vice president at ABI Research.

"Associated machine vision technology like RealSense or Google's Tango opens a compelling AR/VR hybrid opportunity on the mobile platform," Rosen added. "Taking the best of both AR and VR will open up the enterprise market further, and will enable entirely new use cases and applications not yet conceived."

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.